Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses.
Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. That said, here are two Russell 2000 stocks that could be the next big thing and one that may struggle to keep up.
One Stock to Sell:
Enovis (ENOV)
Market Cap: $1.04 billion
With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE: ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.
Why Do We Steer Clear of ENOV?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Earnings per share fell by 9.5% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $18.05 per share, Enovis trades at 4.9x forward P/E. Check out our free in-depth research report to learn more about why ENOV doesn’t pass our bar.
Two Stocks to Watch:
Flywire (FLYW)
Market Cap: $2.11 billion
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ: FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Are We Fans of FLYW?
- Average billings growth of 33.9% over the last year enhances its liquidity and shows there is steady demand for its products
- Estimated revenue growth of 17.3% for the next 12 months implies its momentum over the last two years will continue
- Free cash flow generation is better than most peers and allows it to explore new investment opportunities
Flywire is trading at $17.33 per share, or 2.7x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Granite Construction (GVA)
Market Cap: $5.08 billion
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Why Do We Love GVA?
- Annual revenue growth of 14.3% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin increased by 14.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Granite Construction’s stock price of $115.76 implies a valuation ratio of 15.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
